Korman v. Korman 2015 ONCA 578 is an example of the Court of Appeal correcting a trial judge’s mis-reading of evidence and his mis-interpretation of the resulting trust rules under the Family Law Act.
Korman is the case that explains that spouses generally get to share the post-separation value increase in the matrimonial home.
The trial judge Clifford S. Nelson, would have it otherwise. So much so that he ‘read’ the wife’s evidence to say more than it said. Whereas she actually said: ‘we can share equally’
The judge decided that this meant: ‘we can share equally as long as he includes his company shares and if he doesn’t include his company shares I’m not including the matrimonial home.’ (para. 34)
The court of appeal determined that that this ‘inferential gloss’ was an error (para. 35). Nelson J. didn’t even know how to proceed, stepwise, under the Family Law Act. (para. 28)
What Nelson J. was supposed to have done first, was to decide whether the wife has met her onus to prove that the house was a ‘gift’ from the husband. Nelson of course, readily determined ‘gift’. Why? Because husband put the house in her name to avoid creditors.
Just because you put the house in the wife’s name to escape creditors does not mean you are gifting her the house! (para 32).
s.10 of the Family Law Act maintains the husband’s 50% interest in the house despite that he put it in her name to avoid creditors.
Nelson decided it was a gift which meant that the house was hers and he didn’t share in any part of the post-separation value increase.
The Court of Appeal said No! He is deemed to own half-the house unless and until she meets her onus of proving gift. A creditor-avoidance maneuver is not enough to prove gift.
